Armul Insurance acquired shares of Bannock's common stock on December 28, 2013, for $400,000 and classified them as trading securities.The fair value of these securities on December 31, 2013, was $402,000.Armul Insurance sold these shares on January 3, 2014, for $405,000.
a. What is the journal entry to record acquisition of trading securities on December 28, 2013?
b. What is the journal entry to measure trading securities at fair value and recognize unrealized holding gain on December 31, 2013?
c. What is the journal entry to record the sale of trading securities at a gain on January 3, 2014?
d. What is the total income from the purchase and sale of the securities?
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